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Catholic Officials Finagle Church Finances to Seem Poorer for Court Settlements, Investigation Finds

September 11, 2012


Decades of childhood sexual abuse by Catholic clergy is a grim reality for untold thousands of victims and a source of disgust for non-victims. It would be difficult to find anyone unaware of these cases and the resulting media coverage.

But another kind of malfeasance by Catholic church officials is less well known. It’s the topic of an investigation by the highly regarded periodical The Economist. In a recent issue of the London-based magazine (paper and online), the reporting is largely concerned with the ways Catholic officials have finagled church finances in order to seem poorer when court settlements are at hand.
The authors observe: “The sins involved in Catholic Church book-keeping are not as vivid or grotesque as those on display in the various sexual-abuse cases that have cost the American church more than $3 billion so far; but the financial mismanagement and questionable business practices would have seen widespread resignations at the top of any other public institution.”

The article is titled “The Catholic Church in America: Earthly Concerns,”

The piece indicates that church officials seemingly at every echelon are either incompetent or manipulative when it comes to raising and spending money from public and private sources. This has become an obvious strain on the institution as officials deal with the need to pay out an estimated $1 million per abuse settlement — a total of $3.3 billion during the past 15 years, with more than a third of it paid in California alone.

But matters could get worse for a church that may count a third of the U.S. population as members or former members.

“The [$3.3 billion] total is likely to increase as more states follow California and Delaware in relaxing the statute of limitations on these crimes, most of which were reported long after they happened,” according to the article. “For an organization with revenues of $170 billion that might seem manageable. But settlements are made by individual dioceses and religious orders, whose pockets are less deep than those of the church as a whole.”

The piece cites my colleague, Jeff Anderson, an attorney who represents abuse victims, as asserting that legislatures in 10 states (Arizona, Illinois, New York, Florida, Wisconsin, Minnesota, Colorado, Pennsylvania, Ohio and California) are trying to extend statutes of limitation regarding such crimes.

The article continues: “If any of these efforts succeeds, the expectation . . . is that some of the affected dioceses would seek Chapter 11 protection while they attempt to settle the cases. (Troubled dioceses generally settle suits just before the bishop is due in court.) The diocese of Honolulu could be the next to go bankrupt. In May it was hit by a pair of new lawsuits after the extension of Hawaii’s statute of limitations for victims of abuse.”

No less an eminence than New York’s Timothy Dolan, elevated to Cardinal last January, is said to be spending “substantial” amounts of money lobbying members of his state’s assembly to keep the current statute of limitations in place.

Reporters for The Economist seem to have done exhaustive work poring over public records and other documents in an effort to tally up church losses. Investigators claim the massive settlement payouts now have brought the church, despite its enormous wealth, to the edge of a liquidity crisis. The belief is that such a crisis could cause the church to seek “publicly raised debt” to cover settlement costs. Obviously the vast sums demanded by juries can’t be covered by the $10 a week the average parishioner is said to drop into the offering basket at weekly Mass.

Nor, one can be fairly certain, would the church’s apparent financial woes earn the institution much sympathy, not among those who have been sickened by ceaseless reports of sexual crimes and certainly not among the many victims and their loved ones.

If someone you know needs help, you can contact us:

Our attorneys are highly experienced in childhood sexual abuse law and offer free initial consultations to potential clients. We are also willing to assist other attorneys in sexual abuse cases. Please call 206-257-3590, or email us directly. Conversations will be kept confidential, and even if you are unsure about a lawsuit, often we can direct you to the assistance you need. You will be treated with compassion and respect.

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